White House Opens `Debate' With Congress On US Budget

JUST three days after President Clinton sent his 1995-1996 tax and spending plans to Capitol Hill, the budget battle is in full force.

Spurning the painfully deep deficit reduction they once said was necessary, Mr. Clinton and his fiscal planners are now trying to hold a defensive position based on tax cuts and government programs ``designed to improve Americans' standard of living.''

By contrast, they say, the GOP ``Contract With America'' would reward the rich with tax cuts, make the poor poorer with its brand of welfare reform, and enact a new federalism that would make state leaders so financially strapped they'll have no choice but to raise taxes sharply.

At a Monitor breakfast Feb. 7, White House budget director Alice Rivlin described the administration's new fiscal program as ``an opening of a dialogue with Congress, in this case a dialogue with the opposition party.''

But the GOP has indicated that there isn't much to talk about. Republican leaders are attacking the Clinton budget for not tackling ``runaway'' spending. Sen. Pete Domenici (R) of New Mexico, chairman of the Senate Budget Committee, charged that ``while the current Congress seeks to declare war on the deficit by adopting an amendment to the Constitution for a balanced federal budget, the commander in chief has chosen to abstain from the battle.''

Ms. Rivlin chides: ``Writing fiscal responsibility into the Constitution'' by setting an arbitrary date for balancing the budget is a dangerous economic proposition; ``it isn't always appropriate to balance the budget.'' Doing so this way, she warns, could lead to ``bigger swings in the economy and deeper recession.''

At a Monitor lunch on Feb. 6, Treasury Secretary Robert Rubin and White House economic adviser Laura Tyson credited the White House's 1992 deficit-reduction plan with the nation's strong economic rebound. The president is counting on that growth to further shrink the size of the deficit relative to the gross domestic product.

``The White House is forging ahead assuming a 2.5-percent economic growth rate in 1996, but this flies in the face of the consensus of economists and the Congressional Budget Office, who project a much lower rate,'' asserts Joe Cobb, a senior fellow at the Heritage Foundation. Clinton is painting a rosy scenario, he says.